The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 02/23/2023 | Report No: ESRSC03324 Feb 23, 2023 Page 1 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Peru LATIN AMERICA AND P179538 CARIBBEAN Project Name National Program for Innovation in Fisheries and Aquaculture - Phase II Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Environment, Natural Investment Project 9/14/2023 10/26/2023 Resources & the Blue Financing Economy Borrower(s) Implementing Agency(ies) Eduardo Mora, Ministry of David Ramos López, Production Executive Director Public Disclosure Proposed Development Objective Increase innovation, diversification, investment, and enabling environment in priority fisheries and aquaculture value chains. Financing (in USD Million) Amount Total Project Cost 240.00 B. Is the project being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] The operation will continue World Bank support to Peru’s National Program for Innovation in Fisheries and Aquaculture (Programa Nacional de Innovación en Pesca y Acuicultura – PNIPA), building on PNIPA phase I (P155902). PNIPA supports innovation in the sector by providing grants to actors in the sector to develop innovative practices. The project will have three technical components and component 4 will provide the administrative, management and monitoring and evaluation functions necessary for the effective implementation of the other components. The four components are: Feb 23, 2023 Page 2 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) Component 1 aims to stimulate innovation in the fisheries sub-sector through increased investment in high-impact projects from established research, business, and trade groups; and encourage innovative entrepreneurship that reduces production gaps and socioenvironmental shortfalls. Subcomponent 1.1 will finance demand-driven grants and strategic projects to basic and applied research to benefit the fisheries sub-sector, with the goal of promoting and diffusing innovations that have the potential to improve performance throughout the fisheries value chain. Subcomponent 1.2 will focus on strengthening innovative entrepreneurship based on viable innovations identified during PNIPA’s first phase, as well as new projects. It will focus on scaling viable innovative projects; validating practices for regional, national, and international commercial development; innovative financing; incubation and acceleration services and knowledge transfer studies. Component 2 aims to stimulate innovation in the aquaculture sub-sector through increased investment in high-impact projects from established research, business, and trade groups; encourage innovative entrepreneurship that reduces production gaps and socioenvironmental shortfalls. Subcomponent 2.1 will use competitive grantmaking to finance basic and applied research to benefit the aquaculture sub-sector, with the goal of promoting and diffusing innovations that have the potential to improve performance throughout the fisheries value chain. Subcomponent 2.2 will focus on strengthening innovative entrepreneurship based on viable innovations identified during PNIPA’s first phase, as well as new projects. It will focus on scaling viable innovative projects; validating practices for regional, national, and international commercial development; innovative financing; incubation and acceleration services and knowledge transfer studies. Public Disclosure Component 3 aims to improve enabling conditions of the fisheries and aquaculture sector in support of its modernization and transformation. In the second phase of PNIPA, activities will focus on creating regional innovation networks for key fish and aquaculture species, along with the promotion of sector governance plans at the level of local and regional government, strengthening policies and regulatory frameworks of the national fisheries and aquaculture innovation system. Subcomponent 3.1 will finance innovations to improve the policy and regulatory environment for fisheries and aquaculture. Subcomponent 3.2 will support incentives for public research, development, innovation, and entrepreneurship; improvements in public services for research, development, and innovation; capacity building for the fisheries and aquaculture innovation system; among others. Component 4 provides the administrative, management and monitoring and evaluation functions. The PNIPA program management unit is already in place after being created during the operation’s first phase. The second phase will continue to be led by this unit and operate with a similar organizational structure. PNIPA will be led by a leadership unit reporting to the Vice Minister of Fisheries and Aquaculture. D. Environmental and Social Overview D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] Project location: Activities will be implemented nationwide, both (i) within facilities of public and private universities, Centers for Productive Innovation and Technology Transfer (CITEs), the Peruvian Sea Institute (IMARPE), the National Agency for Fisheries Health (SANIPES), private innovation centers/networks; and (b) in participating regions, which can be any region at the national level. Feb 23, 2023 Page 3 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) Environmental context: Activities may be carried out both in the regions, and in laboratories, research centers, and/or private production facilities. Even though research and technological innovation activities could be located within natural and/or critical natural habitats, interventions that have potential of generating adverse impacts on critical natural habitats and/or substantial or high impacts on natural habitats will not be financed. Research, technology, and innovation institutions involved will have to comply with the relevant environmental, health and safety (EHS) provisions per national regulations, WBG EHS guidelines, relevant ESSs, and international standards (as will be detailed in the corresponding E&S management instrument), including, as necessary: having a valid environmental certification; a license to operate; active internal waste management procedures (including for e-waste, as necessary); and arrangements for external waste management, among others. Social context: Artisanal fishers are especially vulnerable to the impacts of climate change on fisheries, and Peru has the eight most vulnerable fisheries sector in the world in this regard, due to its economic importance and the country’s high climate variability. Small-scale fishers and aquaculture producers depend directly on a climate-exposed natural resource base for their livelihoods, and many have few resources to respond to climate shocks when they occur. Fishers who catch species that are highly sensitive to climate variability can be pushed below the poverty line in high anomaly years if investments are not made to increase adaptive capacity. Peru’s aquaculture sector employs about 100,000 people and generates more than 350,000 jobs in total. The majority of workers in the sector are informal. There is also a prevalence of child labor in the fisheries sector. Aquaculture production is concentrated in the northern regions of Tumbes and Piura, and the southern region of Puno, adjacent to Lake Titicaca. Peruvian aquaculture shows strong potential for future growth through innovation, formalization, and Public Disclosure diversification in species such as tuna and sole. But the sector will have to overcome the challenges of institutional weaknesses in its regulatory environment, water pollution from mining, pathogens management, and climate variability. OP 7.50 (International Waterways) has been triggered for this operation, considering that it was also triggered for the first phase of the Program. The Project will fund the same type of activities as PNIPA I, and is likely to continue to include aquaculture projects on freshwater systems that are shared with other countries. OP 7.50 is thus triggered for the same reasons it was triggered for Phase I (use and risk of pollution of international waterways)– and if new aquaculture investments located on international waterways are included in the financing scope, then the Project needs to be notified – as done for Phase I. D. 2. Borrower’s Institutional Capacity Loan proceeds will be transferred to the Ministry of Production (PRODUCE). Within PRODUCE, the project will continue within the Vice Ministry of Fisheries and Aquaculture, and managed by the existing PNIPA Project Implementation Unit (PIU), established during the first phase of the Project. Our preliminary assessment, based on main lessons learned from the first phase of the operation, indicates that the PIU has a relatively substantial ability to manage project’s E&S risk and impacts in accordance with the ESF, because of the following factors: (1) Currently, PNIPA is led by an Executive Director and includes, among others, a full-time environmental specialist and a full-time social specialist. Both E&S specialists have been dully trained on the ESF as part of the ESF in-person training for LC6 PIUs carried out in Lima in early November 2022. (2) Both E&S specialists have demonstrated high capacity to carry out an effective environmental and social management of the project throughout implementation. Main accomplishments include: (a) updating the project’s Feb 23, 2023 Page 4 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) ESMF to reflect current project’s material conditions, especially in relation to the requirements and process for developing, implementing and supervising subproject-specific E&S management; and (b) carrying out a close follow- up of the subprojects in their closing phase, to make sure these include the necessary and appropriate E&S considerations. To date, no material EHS non-compliances have been identified in subprojects. (3) It is expected that both E&S specialists will be hired as part of the PIU’s core staff for the new operation. However, this will be confirmed during the proposed project’s preparation phase. Despite the above, as part of the Bank’s due diligence the capacity of PNIPA for E&S management will be further assessed, considering: (i) PNIPA has received training on the ESF, however, it does not have experience implementing the E&S standards; ii) the new areas of substantive coverage of the ESF, as compared to the WB safeguards; and (iii) the ability of PNIPA to effectively manage the execution of the project in line with ESF requirements, particularly if the current specialists are rehired. Any capacity strengthening measures and needs be identified, covered under C4, and reflected in the Environmental and Social Commitment Plan (ESCP). II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Moderate Environmental Risk Rating Moderate Based on the available information, the project’s environmental risk classification is considered to be Moderate under Public Disclosure the ESF. Given the nature and scale of activities, low to moderate environmental, health and safety risks and impacts are expected under Components 1 and 2, mainly associated with the basic and applied research on high-impact technologies, technological innovation and strengthening of innovative ventures and scaling up of projects in the fisheries and aquaculture sub-sectors. These are expected to be: (i) temporary and/or reversible; (ii) not significant nor complex/large, and not expected to cause serious adverse effects to human health and the environment; (iii) site- specific; and (iv) easily mitigated in a predictable manner, with routine safety precautions expected to be sufficient to prevent accidents. Even though some activities may be carried out within natural protected areas (NPAs), these will be limited to technical assistance activities to promote and increase the sustainable production of fishery and aquaculture resources, and research activities, and thus no relevant impacts or risks on these are expected. Furthermore, these activities will be subject to a robust Exclusion List through which those with the potential of generating adverse impacts on critical natural habitats and/or substantial or high impacts on natural habitats will be automatically screened out. Expected environmental, health and safety risks and potential impacts are related to: (i) the execution of basic and applied research activities on high-impact technologies, technology transfer and building capacity for technology and knowledge absorption, mobile laboratories for quality testing and strategic projects focused on key challenges in regional and national artisanal fishery value chains in the fisheries sub-sector (SC 1.1) and aquaculture sub-sector (SC 2.1); (ii) scaling up viable innovative projects; innovative financing, Fintech, seed funding, and angel investing; incubation and acceleration services; innovative climate projects in the fisheries sub- sector (SC 1.2) and aquaculture sub-sector (SC 2.2); and (iii) fieldwork within natural ecosystems. Even though activities are expected to be of limited scope and site-specific, low to moderate environmental, health and safety impacts could occur if the necessary (and readily available) management measures are not incorporated into the corresponding activities. These include, among others: specific environmental degradation/pollution events in case of inadequate management of waste in laboratories (including of hazardous waste) and research institutions and/or Feb 23, 2023 Page 5 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) inadequate management of water and air emissions; specific contamination events due to inadequate management and final disposal of e-waste, minor community and worker health and safety issues related to research and technological innovation activities; environmental degradation events and health and safety issues as a result of the development of technologies; and habitat degradation during field work. Potential adverse environmental risks and impacts will be further analyzed during project preparation, as more information becomes available, especially in relation to: type of technical and applied research and types of strategic projects to be financed under SCs 1.1 and 2.1. Social Risk Rating Moderate The social risk is classified as Moderate, at Concept stage, under the ESF. Although the project is expected to have a number of positive social impacts, there are certain risks related to the following aspects: (i) risk of non-compliances with ESS2 and with national regulations on labor and working conditions for workers (anti-discrimination, SEA/SH, and health and safety issues); (ii) risk of elite capture (due to information asymmetry), reducing the opportunities of traditionally underserved populations; (iii) risk of barriers to access or outright exclusion from participating in project benefits for indigenous peoples (and among them, indigenous women) because of their cultural and linguistic differences and their specific disadvantaged situation for accessing technology and the knowledge needed to apply for competitive grants; and (iv) risk of sexual harassment/sexual exploitation and abuse (SH/SEA) among the beneficiaries and local population during the preparation/implementation of subprojects (mainly in subprojects located in remote communities, with low levels of monitoring/supervision). However, these risks are not expected to be significant and can be managed in a predictable manner. Subprojects will not require land acquisition or restrictions on land use leading to physical and/or economic displacement. The impacts on indigenous peoples and other vulnerable groups are expected to be positive, since the project will be designed to offer benefits and Public Disclosure opportunities to them, with the opportunity for them to express their viewpoints during the stakeholder engagement activities to be carried out. The PIU for this Phase II project has an E&S team with previous experience in implementing projects in compliance with the Bank safeguards and corporate requirements, which will enable it to manage these impacts and to reduce the social risks identified. Potential adverse social risks and impacts will be further analyzed during project preparation, as more information becomes available. B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: This standard is relevant. Given that: (i) specific sites of interventions, as well as research and technological innovation activities to be financed, are not known, and will be defined during implementation; (ii) the set of potential research and technology innovation sites/institutions to be selected are located in rural and urban areas at the national level; and (iii) the scope of interventions at each site/institution varies, the Borrower will develop an Environmental and Social Management Framework (ESMF), to adequately identify and manage potential project E&S risks and impacts and to guide the management of E&S issues. The ESMF will be developed during project preparation and disclosed in draft version, prior to Appraisal; including the following: Feb 23, 2023 Page 6 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) (i) A detailed Exclusion List: In order to make sure that the interventions to be considered in the project are of moderate or low risk, the ESMF will include an Exclusion List with the set of interventions that will not be financed due to their potential significant E&S risks. It will explicitly rule out interventions that have potential of generating significant impacts on the health and safety of the researchers and participants. It will also rule out interventions with the potential to have adverse impacts on critical natural habitats and/or substantial or high impacts on natural habitats, cultural heritage and indigenous peoples, as well as to increase or intensify the risk of child labor. It will also rule out research and technology innovation proposals involving the introduction of exotic species, as well as the acquisition of equipment for laboratories not complying with minimum infrastructure and processes required to ensure an adequate treatment and disposal of waste. This detailed list will rule out any substantial and high-risk research and technology innovation proposals and will be reflected in the project ESMF. It will be specific enough to facilitate the objective exclusion of interventions during implementation. (ii) For research and technology innovation activities (interventions to be financed under C1 and C2): A robust tool for the screening, review, and approval of interventions to be financed through five grant and loan funding windows. So that the PIU will be able to identify interventions that need to be excluded based on their E&S impacts and risks; determine the environmental permits required per national law; identify the E&S management measures to be included as part of the interventions’ Environmental and Social Management Plans (ESMPs) and checklists, including provisions for the prevention of child labor; determine the need of an E&S management instrument per national regulations; etc. (iii) Process for developing, approving, and implementing the ESMPs and/or checklists of each intervention, depending on their level of risk, which will include all the necessary E&S management measures in compliance with relevant ESF standards and will consider the WB’s EHS General and Specific Guidelines (Aquaculture and Fish Public Disclosure Processing). ESMPs are expected to be succinct documents, listing main expected ESHS risks and impacts of each proposal, and the corresponding management measures to address those impacts. The ESMF will include a template for these ESMPs. (iv) ESHS requirements applicable to each stage of all the calls for competitive funding processes in the five grant and loan funding windows to be included in the project, including requirements to be incorporated in the call for proposals such as social inclusion criteria for underserved populations; considerations during the proposal evaluation (mainly compliance with the exclusion list); considerations during negotiations and grant or loan award; and supervision and oversight during implementation and closure. Awarded proposals will require the approval of an ESMP or checklist prior to the start of activities, following the process to be laid out in the ESMF, aligned with the requirements of relevant ESSs and national regulations. (v) Monitoring measures during implementation, including project reporting system and how ESF provisions will be sampled and reported on, exploring the option of involving community monitoring schemes. (vi) A social assessment, including an analysis of the situation of groups at risk of exclusion (such indigenous peoples, underserved communities, the poor, etc.), regarding on how these groups may be excluded from the project benefits (and any impacts that may accrue to them). (vii) The ESMF should include information on risks related to gender exclusion and ways to ensure women’s inclusion and non-discrimination provisions. Based on this analysis, the ESMF should include and recommend measures to avoid/mitigate such risk of exclusion, guaranteeing that applicants and their research grants are reviewed avoiding gender and cultural biases. The measures would then need to be built into project design. The client may use existing assessments or may undertake a rapid assessment based on the experiences of the first project. Feb 23, 2023 Page 7 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) As more information about the scope of the research and technology innovation interventions becomes available, potential E&S risks and impacts will be identified and assessed, including elements to facilitate social inclusion as much as possible. This effort will also consider making information available to beneficiaries in an accessible form. The ESMF will be developed in compliance with ESS1 requirements, WBG General Guidelines of Environmental, Health and Safety (EHS) among others, which will be reflected in the ESMF. It will be proportionate to the expected risks and impacts of the Project, and assess all relevant direct, indirect and cumulative E&S risks and impacts of interventions. The timeline for obtaining and disclosing the final ESMF will be specified in the ESCP. The PNIPA I ESMF will be a valuable input for the drafting of the PNIPA II ESMF. The current PNIPA E&S specialists will be responsible for developing this new ESMF. As part of the preparation of the ESMF, the Borrower will be also expected to identify opportunities to promote the inclusion of underserved demographics (i.e., women-led organizations), geographies, and indigenous groups among the program beneficiaries. For instance, the evaluation criteria are expected to include (subject to confirmation during preparation) provisions like assigning a 25% incentive if the activity involves the participation of local fishers and aquaculturalists, 10% if the innovation is led by them, 15% if it is led by women, and 15% if it is led by IPs and takes into account ancestral knowledge. Technical Assistance (TA): Consultancies, studies, capacity-building activities, and any other technical assistance, where relevant, would need to be consistent with the ESF and carried out in accordance with ToRs acceptable to the WB. Specifically, TA involving NPAs to improve management of fisheries and aquaculture resources as well as sectoral policy advice will consider Public Disclosure provisions of ESS3 and ESS6. This requirement will be reflected in the project’s ESCP. Areas where “Use of Borrower Framework” is being considered: None. ESS10 Stakeholder Engagement and Information Disclosure The PNIPA program includes various types of stakeholders at the national and sub-national levels and they have different characteristics. The first type is the project-affected parties such as: local communities, peasant communities, native communities, agricultural organizations, indigenous organizations, and aquaculture organizations and artisanal fishermen organizations, among others . The second type is the other interested parties and include academics, NGOs, government agencies, local authorities, researchers, entrepreneurs who may have an interest in the Project, among other parties. ESS10 requires meaningful consultation with all interested parties, making it possible to provide timely, relevant, understandable, and accessible project information. Consultations will need to be carried during project preparation and also during project execution, ensuring that they are culturally appropriate, without manipulation, interference, coercion, discrimination or intimidation. The means of doing this will be laid out in a Stakeholder Engagement Plan (SEP) to be developed during project preparation and disclosed in draft form prior to Appraisal. The version to be disclosed prior to Appraisal will need to include the documentary evidence of the consultations with the key stakeholders carried out until that point (including those with national indigenous and agricultural organizations, and representative associations of project-affected parties), as well as the subsequent stakeholder engagement activities planned after appraisal and those expected during project implementation. Feb 23, 2023 Page 8 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) The SEP should consider the characteristics of these two types of stakeholders involved in PNIPA II. The greatest efforts should be made to have fluid communication with the first type, prioritizing face-to-face interactions when health protocols allow it, particularly in areas with indigenous populations and other vulnerable groups. Specific approaches and higher resource outlays should be used for communication; for example, having translators for each of the languages of the different communities to translate the workshops and the informative material that can be prepared. On the other hand, with the second type of stakeholder mentioned above, consideration should be given to technical inputs and any related observations that may be made on the project. This standard requires to provide information, and to attend concerns and grievances from all the stakeholders. In line with this requirement, the SEP will propose and implement a grievance redress mechanism (GRM) to receive and facilitate the resolution of such concerns, building on the experience of the first operation. The grievance mechanism should reinforce that existing in PNIPA I in a manner that is commensurate with the potential risks and impacts of the project and the sociocultural characteristics of the stakeholders. This mechanism should enable concerns to be addressed quickly and effectively in a transparent manner that is culturally appropriate and accessible to all project stakeholders, without cost or retribution. For such purposes and in line with the previous experiences of PNIPA I, the GRM should include translators available to attend indigenous peoples in their languages. . The SEP will be finalized, consulted and disclosed no later than 30 days after effectiveness (date to be confirmed in the ESCP). The SEP will include: (i) stakeholder identification, including project- affected parties and other interested parties, and an analysis of their needs and means preferred to be engaged; (ii) modalities or mechanisms for dissemination, participation and consultation planned and implemented during project preparation and Public Disclosure implementation; (iv) when and how often the engagement will occur; (v) how feedback will be solicited, recorded and monitored; (vi) how grievances or complaints have been/will be addressed and reported; (vii) who will be responsible for the activities involved; (viii) timeline for this engagement, and estimated budget; and (ix) analytical summary and documentary evidence of the consultations carried out, redacting the personally identifiable information of the participating stakeholders. The project communication activities will also include indigenous peoples and underserved groups, mainly in remote areas. Where necessary learning from the first phase, the SEP will include risks related to including marginalized groups (including indigenous populations), in stakeholder engagement. This section could cross-reference some of the risks related to information dissemination for IPs listed under ESS7. B.2. Specific Risks and Impacts A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions This standard is relevant. Based on the information available, the project is likely to rely on direct workers (inside the PIU), and potentially contracted workers (to be confirmed later if needed, in certain subprojects). The involvement of community workers is still unclear at this stage, but it will be determined before appraisal. Risks initially identified include: (i) different forms of harassment toward and between project workers; (ii) sexual exploitation and abuse, and sexual harassment (SEA/SH); (iii) discrimination at work; (iv) occupational health and safety conditions; and (v) the risk that project workers could be hired without the right type of contract in relation to the type and duration of Feb 23, 2023 Page 9 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) the work expected to be performed; and (vi) potential risks related to child labor (mainly in artisanal fishing), among others. To manage the risks and impacts covered by this ESS2, the Borrower will prepare Labor Management Procedures (LMP) that will describe the type of workers involved, identify the gaps with the labor national regulation and the requirements needed to assure compliance with them and this ESS. This will cover measures to manage worker relationships properly, terms and conditions of employment, provisions for non-discrimination and equal opportunity, worker’s organizations and freedom of association, occupational health and safety for workers, provisions to protect the workforce (including via minimum wage protections), the prevention of child labor and forced labor, the prevention of sexual exploitation and abuse and sexual harassment (SEA/SH), and measures to promote health and safety in the workplace. The LMP will include a separate grievance redress mechanism for project workers, including the PIU staff involved in the project, with special considerations for vulnerable workers (such as women, people with disabilities, migrant workers, indigenous persons, and Afro-descendants). Additionally, the Procedures will include a “Worker’s Code of Conduct” outlining the obligations of all project workers, adherence to which will be a condition of their employment. The Code of Conduct will explicitly address issues of SEA/SH and provisions to prevent discrimination. The LMP will further ensure that the health and safety of workers are adequately addressed using the WBG Environmental, Health, and Safety (EHS) Guidelines, WHO guidelines on COVID-19 and national regulations as needed. The LMP is tentatively expected to be ready no later than 60 days after the Effective Date. The Appraisal-stage ESRS Public Disclosure and the Environmental and Social Commitment Plan (ESCP) will confirm the specific timeframe for preparing the LMP. During project implementation, the LMP may be revisited and updated as additional labor-related risks or issues appear. ESS3 Resource Efficiency and Pollution Prevention and Management This standard is relevant. i) Energy efficiency measures: Energy efficiency measures to be considered will be laid out in the ESMF, based on the WB’s EHS guidelines for energy conservation. In general, and to the extent possible, all investments will utilize measures to increase energy efficiency, and wherever possible, technical specifications for the appliances and equipment will promote environmentally preferred products. ii) Water quality: Based on the available information, no significant risks on water quality are expected. However, associated potential risks/impacts will be further assessed during project preparation and ESMF will establish criteria and requirements associated with ESS3, including that subprojects with substantial or high impacts on water quality will not be eligible; and aquaculture subprojects with moderate risks on water quality must have management measures on these aspects as part of their ESMPs. iii) Pollution management from generated e-waste: The generation of e-waste and potential associated risks/impacts will be further assessed during project preparation in order to further delineate the scope of these guidelines and corresponding requirements, commensurate to the level of the expected risks/impacts. Feb 23, 2023 Page 10 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) iv) Pollution management of research and technological innovation to be funded through the competitive funding schemes: research and technological innovation to be funded through the five grant and loan funding windows could generate site-specific low to moderate impacts/risks on the environment and/or human health due to inadequate management of waste, including chemical waste, and/or other types of hazardous byproducts to be generated. The ESMF will include the EHS requirements applicable to the different stages of the competitive processes (call for proposals, submission and evaluation of proposals, negotiation, grant or loan award, execution and supervision and closure), with which the corresponding beneficiaries will have to comply with to ensure adequate waste management and avoid pollution, which will be reflected in corresponding ESMPs/checklists (required prior to the start of activities). This, in line with both national regulations and necessary gap-filling measures to ensure compliance with ESS3 requirements. v) GHG accounting: As part of project preparation, the project will conduct GHG accounting. The ESMF’s Exclusion List will rule out specific types of research and technological innovation that will not be eligible for funding due to the level and type of expected environmental pollution impacts and risks. ESS4 Community Health and Safety This standard is relevant. The PNIPA II project consists of three operational components: i) promoting innovation and entrepreneurship in the fisheries sub-sector, ii) promoting innovation in the aquaculture sub-sector, and iii) governance for innovation in fisheries and aquaculture. The first two components are focused on the development of Public Disclosure knowledge via the promotion of applied and adaptive research in aquaculture and fisheries. Proper application of this Standard will involve avoiding or minimizing the potential for community exposure to water-borne, water-based, water-related, and vector-borne diseases, as well as communicable and non-communicable diseases that could result from project activities, taking into consideration differentiated exposure and higher sensitivity of vulnerable groups. All three components mentioned involve the provision of services to communities, which raises the issue of the safety of services. Thus, it is necessary to establish and implement appropriate quality management systems, to anticipate and minimize risks and impacts that such services may have on communities. A relevant aspect is the concept of universal access, where technically and financially feasible. Specifically, C3 will have a subcomponent related to the implementation of policies, instruments, and regulations for innovation and entrepreneurship in fisheries and aquaculture. The promotion and implementation of these norms will consider universal access as a cross-cutting criterion. The research and technological development to be funded through the five grant and loan funding windows could generate site-specific low to moderate impacts/risks on community health and safety, related mainly to (i) the inadequate management of waste, and (ii) the technological innovations whose final users/ beneficiaries are individuals and/or the larger community. The ESMF will include the necessary EHS requirements applicable to the different stages of the competitive processes (call for proposals, submission and criteria for the evaluation of proposals (with potential inclusion aspects, as a result of the analysis to be carried out), negotiation, grant or loan award, execution and supervision and closure) with which the corresponding beneficiaries will have to comply with to mitigate and adequately manage CHS risks, which will be reflected in corresponding ESMPs/checklists (required prior Feb 23, 2023 Page 11 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) to the start of activities). Likewise, the ESMF’s Exclusion List will rule out specific types of research that will not be eligible for funding due to level and type of expected CHS impacts and risks. Additionally, given that certain activities will be carried out in laboratories, research centers, and/or private production facilities, the ESMF will also include Life & Safety considerations, based on the Bank's Note of “Implementations of the Bank’s Life and Fire Safety Requirements for Building Accessible to the Public”’. - ESF Life Fire Safety Tip Sheet. These considerations will have to be reflected in the specific ESMPs/checklists that beneficiaries will have to prepare, as applicable. The ESMF will include codes of conduct as well as a flowchart describing how SEA/SH incidents will be handled and derived if needed to legal, psychosocial, and medical service providers in the areas where the project operates and what to do in case there are no service providers immediately available. Training sessions to explain said codes of conduct, local regulations in relation to SEA/SH, and sanctions if codes are not respected will be carried out periodically for all researchers and staff from the participating institutions to mitigate the risks of SEA/SH in the workplace and during fieldwork. This, in line with both national regulations and necessary gap-filling measures to ensure compliance with ESS4 requirements. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement This standard is not currently relevant. The proposed project will not require the acquisition of land or involve Public Disclosure restrictions on land use leading to physical and/or economic displacement. This will be specified in the ESMF’s Exclusion List. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources This standard is relevant. Even though research and innovation activities to be funded under C1 and C2 could overlap with natural habitats, it is not expected that these will generate significant adverse risks and impacts over these habitats or their natural resources. This, mainly considering that based on the available information: (i) infrastructure construction is not envisioned, and (ii) research and/or technological innovation interventions with a significant environmental risk and/or that pose potential significant adverse impacts over natural habitats will be automatically screened out. The ESMF will detail the necessary requirements that such research and/or technology innovation activities will have to comply with in order to mitigate mainly low potential impacts on natural habitats, including obtaining the necessary environmental permits required per national regulations; consideration of environmental management measures during fieldwork involving water, flora and fauna resources; etc. These requirements will need to be reflected in the interventions’ corresponding ESMPs/checklists (required prior to the start of corresponding activities). The ESMF exclusion list will explicitly rule out interventions that have potential of generating significant impacts on critical natural habitats (CNH) as well as substantial or high impacts on natural habitats (NH), only those activities with low to moderate impacts on NH will be eligible for financing. Interventions that involve the introduction and/or promotion of invasive species and/or non-native species (currently not established in the region) Feb 23, 2023 Page 12 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) will also be ruled out. The ESMF will include the screening process to assess proposed activities within CNH & NH and assign an environmental risk categorization, aligned with the ESMF definitions. In the case of interventions located within CNH (mainly protected natural areas - NPAs), these will be limited to research and technical assistance activities to improve the management of fisheries and aquaculture resources in accordance with the regulations established in the management plan and zoning of the NPAs. . In addition, the following requirements would have to be met for the interventions within NPAs to be considered eligible under the Project: (i) interventions related to the management of fishing and aquaculture resources are located within an area classified as “Zone of Direct Use” or “Zone of Special Use” per the NPA management plan; ii) interventions would have to obtain the necessary permits per national regulations; in the case of interventions that involve the management of fishing and aquaculture resources, a specific management plan approved by the National Service for Protected Natural Areas (SERNANP) is required, which is the instrument that certifies that the intervention is aligned with the NPA management plan; iii) does not involve infrastructure construction; (iii) the NPAs’ Management Unit has been and will continue to be actively involved in the development and execution of the intervention; among others to be determined during due diligence. These criteria, and the process to assess compliance with each will be reflected in the ESMF. The Project may include activities that promote the development/ scaling up of sustainable primary production and harvesting of living natural resources. The overall sustainability of these activities, as well as their potential impacts on habitats, biodiversity and communities, will be addressed and managed as an intrinsic cross-cutting aspect of Project interventions, throughout all of its components, along with other measures as needed considering ESS6 Public Disclosure requirements. This will be further assessed and confirmed during preparation and reflected in the ESMF. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities This standard is relevant. The project will involve indigenous peoples (IPs) from all over the country, located in the highlands and the Amazon jungle. According to the Peruvian Ministry of Culture’s database, there are 55 indigenous peoples in Peru, 51 from the Amazon and 4 from the Andes, denominated “native communities” and “peasant communities” respectively. During the previous project (PNIPA Phase I), the indigenous peoples who participated the most were mainly: (i) Quechuas (from Puno, Cusco, Huancavelica, Junín, Pasco, among other regions); (ii) Aymaras (from Puno); (iii) Ashaninkas (central jungle of Junin, Pasco and Ucayali); (iv) Machiguengas (belonging to the ethnolinguistic family of Arawak in the Urubamba river basin, in Cusco); (v) Yaneshas (Arawak, located in the central jungle of Pasco and Huánuco Departments); (vi) Awajun and Wampis (both belonging to the Jibaro ethnolinguistic family and located mainly in the northeast jungle in Amazonas Department, in Santiago River basin); and (vii) Kandozi/Candoshi (located in Loreto Department, in the northern jungle), among other indigenous peoples. These IPs were all considered beneficiaries of the PNIPA I project. At the time of that project’s design, three main social risks were identified: 1) Low participation of direct beneficiaries of the subprojects in each stage of their execution; 2) Lack of access to relevant information that could generate misunderstandings between representatives of the subproject executing entities and the local communities involved; and 3) Lack of understanding by the subproject beneficiaries of the information that was provided. These risks have been managed by constantly monitoring the training and technical assistance carried out; consulting beneficiaries to see if they understood the subproject-specific information provided; and carrying out training and assistance activities in relation to their own Feb 23, 2023 Page 13 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) economic activities, on their fish farms and boats. In addition, among the participants, there is a bilingual population that can transmit subproject information in the local indigenous languages. While the results are still coming in, there is ample evidence that participating IPs have indeed benefited from the Phase I project, though in a more culturally appropriate way. They have obtained access to new technologies and technology transfer processes; improved their competitiveness by producing value-added products, reducing production costs and increasing incomes along the way; and developed capacities to improve community-based extraction and cultivation practices and to strengthen their organizations. It will be very important to integrate all these lessons learned from PNIPA I into this second phase. Additional information about their participation in the Project will be provided in the project’s Indigenous Peoples Planning Framework (IPPF). The impact of the project on IPs is expected to be positive because it is intended to offer them benefits (through competitive grants). However, there are risks related to: (i) barriers to access to project benefits because of linguistic and cultural differences (the participating IPs are usually not fluent in Spanish and might not understand the details or requirements of the project processes) and technological issues (many of them don’t have access to internet, e- mail, phone), among other limitations; (ii) limits to access the project grievance mechanisms (for the same reasons mentioned); and (iii) risks of GBV in the subprojects, mainly in those located in remote areas. The project will not include activities that would require “Free, prior and informed consent” (FPIC) since the project: (i) will not acquire/affect IPs’ land/natural resources; (ii) will not cause relocation of indigenous peoples from their land or natural resources; or (iii) will not have significant impacts on their cultural heritage, identity and/or culture, ceremonial, or spiritual aspects. These conditions will be stated as part of the project Exclusion List, included in the Public Disclosure ESMF, mentioned above under ESS1. However, considering the project risks identified and a small portion (56 of around 1900) grants involved indigenous communities during de first phase of the project (PNIPA 1) the stakeholder engagement process will need to be performed in a manner that is accessible, linguistically and culturally appropriate, and inclusive for IPs, and should be developed from the earliest stages of project preparation. The PIU will prepare, consult, and disclose a draft IPPF prior to Appraisal, including the information about the consultations carried out with the national indigenous and agricultural organizations. Additional stakeholder engagement activities with other key IP stakeholders will continue afterward, and the feedback obtained will be summarized and incorporated into an updated IPPF, along with any potential changes made to the document based on such inputs. The specific timeline for the finalization of the IPPF will be included in the Appraisal-stage ESRS and detailed in the ESCP. ESS8 Cultural Heritage This standard is not currently relevant. Based on the currently available information, the operation will not include either infrastructure construction or earthworks with the potential of generating chance finds. Likewise, activities involving adverse impacts on cultural heritage (tangible and intangible) are not expected as part of the project. The relevance of this ESS will be further assessed as part of the Bank’s due diligence, as more information becomes available. ESS9 Financial Intermediaries Feb 23, 2023 Page 14 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) This standard is currently not relevant, as the project will not involve the use of FIs. C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways Yes OP 7.60 Projects in Disputed Areas No III. WORLD BANK ENVIRONMENTAL AND SOCIAL DUE DILIGENCE A. Is a common approach being considered? No Financing Partners N/A B. Proposed Measures, Actions and Timing (Borrower’s commitments) Actions to be completed prior to Bank Board Approval: The Borrower will draft and disclose the following instruments: Public Disclosure 1. Draft Environmental and Social Management Framework (ESMF), prior to Appraisal* 2. Draft ESCP prior to Appraisal. The final version will be prepared for Negotiations 3. Draft SEP**, including a project-specific Grievance Redress Mechanism (GRM), prior to Appraisal* 4. Draft IPPF, prior to Appraisal* *Date for final versions to be identified during due diligence and reflected in the ESCP; these and are expected to be ready between the project effectiveness and disbursement milestones. ** The draft SEP will include the documentary evidence of the consultations carried out. Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): 1. Timeframe for the finalization of ESMF, SEP, LMP and other E&S risk management instruments needed. 2. Provisions for the preparation of subproject ESMPs, checklists, and other ESF instruments. 3. Training for PIU staff on the Project’s E&S instruments and the ESF. 4. Staffing and implementation arrangements for the PIU, including the contracting of the PIU E&S specialists. 5. Provisions related to the functioning of the GRM. C. Timing Tentative target date for preparing the Appraisal Stage ESRS 18-Aug-2023 Feb 23, 2023 Page 15 of 16 The World Bank National Program for Innovation in Fisheries and Aquaculture - Phase II (P179538) IV. CONTACT POINTS World Bank Contact: Juan Jose Miranda Montero Title: Senior Environmental Economist Telephone No: +1-202-473-8558 Email: jjmiranda@worldbank.org Contact: Griselle Felicita Vega Title: Senior Agriculture Specialist Telephone No: 5357+2306 / 51-1-622-2306 Email: gvega@worldbank.org Borrower/Client/Recipient Borrower: Eduardo Mora, Ministry of Production Implementing Agency(ies) Implementing Agency: David Ramos López, Executive Director V. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Public Disclosure Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects VI. APPROVAL Task Team Leader(s): Juan Jose Miranda Montero, Griselle Felicita Vega Practice Manager (ENR/Social) Maria Gonzalez de Asis Recommended on 23-Feb-2023 at 08:56:32 EST Safeguards Advisor ESSA Marco Antonio Zambrano Chavez (SAESSA) Cleared on 23-Feb-2023 at 12:40:27 EST Feb 23, 2023 Page 16 of 16